German car manufacturers have achieved a dramatic change in the global automotive industry. Cars are no longer what they were two decades ago. With German technology and innovation at work, we have seen several groundbreaking projects that have kept German cars in a league of their own entirely. A recent example of such creative adventurism is General Motors’ strategic alliance with AVTOVAZ, which is a Russian automobile company.
It is not the first time that we see Germans and Russians establish alliances to shock the world. This time, however, the coalition has generated very positive vibes; obviously because it is totally harmless and has no intention of taking over the world. History aside, however, they are intent on grabbing market share from the automotive industry, which in many ways can be perceived as a threat to companies around the world.
The venture between the two companies was called CJSC GM-AVTOVAZ, and it entered into force on June 27, 2001. The representatives of General Motors, AVOTVAZ, and the European Bank for Reconstruction and Development (EBRD) signed a general framework agreement at that time. . Subsequently, the founding meeting of the joint venture held on July 30, 2001 and August 2, 2001, was registered with the Russian Ministry of Justice.
The much talked about company started with a total shareholder contribution of $238.2 million in which General Motors and AVTOVAZ shares were 41.61% each and the remaining 16.78% was contributed by the EBRD. EBRD’s shares were subsequently acquired by CJSC GM-AVTOVAZ following the approval of an agreement by the Board of Directors, which left both companies with 50% ownership each.
According to this company, CJSC GM-AVTOVAZ is engaged in the production of Chevrolet NIVA based on Lada Niva (Russian word for farm field). The car is sold to customers in the Russian Federation and many countries of the Commonwealth of Independent States (CIS). Cars are offered to customers at different locations through a Dealer Network.
The junk program was launched by CJSC GM-AVTOVAZ on October 1, 2014, according to which an option is provided to customers under the terms of the exchange program designed for car owners to trade in or scrap their vehicle while taking advantage of a discount on the new Chevrolet NIVA. This offer is extremely exciting for customers who want to experience the feeling of the new Chevrolet NIVA. The modification of the new car was made by GM, while it has been produced in Tolyatti, Russia since 2002. The interiors and bodywork are new but it carries the transmissions and mechanics of Lada Niva and the engine of the original VAZ 2121 (an SUV).
Many ups and downs occurred in the 13 year period, however the started company is still in business and has achieved immense success in the world of automobiles. As recently as September, company directors approved a $200 million expansion of the plant, which is planned for completion by 2015. This will help increase NIVA’s production capacity by 20%, which will become by 120,000 vehicles in a year and will require doubling the workforce to 2,900 employees.
